Making Markets

Mark Dow: A Behavioral Macro View - [Making Markets, REPLAY]

5 snips
Aug 30, 2024
Guest
Mark Dow
Mark Dow, founder of behavourialmacro.com and a former economist at the US Treasury and IMF, challenges conventional economic wisdom. He explains why economists often struggle as investors and delves into his unique market approach. Mark argues that quantitative easing has minimal impacts and expresses a surprising lack of concern over US debt levels. He also discusses the psychological forces shaping market narratives and highlights the need for understanding financial stability in today's economy.
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INSIGHT

Economists Struggle as Investors

  • Economists often fail as investors due to their reliance on rational expectations and fundamentals.
  • Market psychology and narratives outweigh fundamentals especially in short-term trading.
ANECDOTE

Trader Intuition Beats Theory

  • Mark Dow observed traders making money despite poor understanding of economics and Fed policy.
  • He learned technical analysis and behavioral finance to bridge the gap between economics and trading success.
ADVICE

Trade with Patterns and Narratives

  • Use pattern recognition and technical analysis to identify market turning points.
  • Combine these with plausible narrative catalysts to validate and manage risk in trades.
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